WITH apparently no instant relief in sight for consumers from the nonstop rocketing of fuel pump prices until the yearend at the least, a senior lawmaker on Wednesday upbraided the Department of Energy (DOE) for “moving at an apparent turtle’s pace” on a two-year-old DOE circular establishing a Strategic Petroleum Reserve Program (SPRP) to ease the impact of global oil shocks on the public.
National Unity Party (NUP) president and Camarines Sur LRay Villafuerte said the DOE should act on the SPRP with a much greater sense of urgency, “more so at this time when the latest global oil price shock has raised the retail costs of diesel and gasoline for the 10th time in the same number of weeks.”
The lawmaker took a jab at the DOE following another round of fuel rate adjustments last Tuesday, September 19—the 11th time in 11 weeks—amid fears that the price hikes would continue till end-December and that global oil prices could surpass $100 per barrel for the rest of the year.
Following a recent consultative meeting with House Speaker Martin G. Romualdez and top executives of oil companies, Villafuerte said DOE officials have said the weekly gasoline and diesel price hikes for almost three months now are likely to continue till the year’s last quarter because of the combination of rising global demand and supply and export cuts by the Organization of Petroleum Exporting Countries (OPEC) and Russia.
Oil companies this week raised pump prices big time by P2.50 for diesel and P2.00 for gasoline, as the international benchmark Brent crude rose significantly to $93 a barrel from the previous week’s $89 rate, triggering speculation that the rate could hit $100 in the coming months.
Villafuerte said the oil price spirals are likely to continue for the rest of the year at the very least, citing a Reuters report that Saudi Arabia plans to continue cutting its supplies to the world market by 1 million barrels until December, while Russia similarly eyes its production cutback of 300,000 barrels until the end of 2023.
He said sky-high fuel rates and rising food prices, which are partly a result of the higher transport costs of producers and traders, are mainly responsible for the sticky elevated inflation, which is expected to remain high for the rest of the year—and have already prompted financial analysts, such as those from ANZ Research, Nomura Global Markets Research, and Moody’s Analytics to downgrade their growth forecasts for the Philippines for the full year of 2023.
“Our energy officials are not helping President Marcos deliver on his ‘walang iwanan’ commitment to improve the lives of all Filipinos by seemingly sitting on their hands on this SPRP, whose purpose is to help cushion, especially for the poor and low-income families, the debilitating impact of spiraling day-to-day transport and food expenses,” he said.
“If the DOE, under the watch of Secretary [Raphael] Popo [Lotilla], had only acted on this SPRP with a greater sense of urgency than the department did during the previous government, the proposed fuel reserve meant to enhance the security of fuel supply would be up and running possibly before the yearend or sometime next year,” said Villafuerte.
“But it seems this SPRP is still moving at an apparent turtle’s pace—if it is moving at all—at the DOE, given that we have heard nothing about the progress of this plan ever since it was formally put in motion exactly two years ago this month,” he added.
Villafuerte wondered aloud why DOE has yet to set this SPRP in motion when two major reasons for the country’s stubbornly elevated inflation are the rising food and transport costs, which, in turn, are partly triggered by the undue spikes in fuel prices in the global market.
The lawmaker chided Lotilla and DOE after getting hold just recently of a copy of Department Circular No. 2021-09-0028, issued by former Energy Secretary Alfonso Cusi on September 16, 2021, establishing the government-run Philippine Crude Oil and/or Finished Petroleum Products and Biofuel Reserve to, in this Department order’s words, “enhance security of fuel supply.”
This proposed facility shall be run by the Philippine National Oil Co. (PNOC), which was created in 1973 to guarantee the adequate supply of oil and oil products and, later, to explore and develop our country’s energy sources.
He said that this 2021 DOE circular on the SPRP has not progressed as quickly as it should have, given the currently relentless global oil price spirals, and that energy officials have yet to lobby the 19th Congress at this point to pass a bill setting up such a fuel reserve facility—which was one of the assigned tasks to the DOE under DC No. 2021-09-0028.
“And if the SPRP is not the answer, then our DOE officials must keep the public abreast of whatever proposals they have in mind, if not working on already, to somehow ease the impact of global oil market volatility on the consumers of an oil importer like the Philippines,” Villafuerte said.
